Microsoft’s involvement in Dell buyout proving complicated

The software giant wants its money to buy influence over the PC OEM.

When reports of Microsoft's desire to be involved in Dell's leveraged buyout surfaced, we speculated that the software giant would want to be involved in the PC manufacturer's business and argued that this might be contrary to the very goals underlying Dell's plan to go private.

So it has come to pass, with the Wall Street Journalreporting that Microsoft's role is a "sticking point" in negotiations. It turns out that Redmond wants more than just an investment for the $2 billion or more that it's paying—it wants a say in how the company is run. According to one of the people involved, "under one scenario being discussed, Dell would agree to use Microsoft's Windows software to power the vast majority of its devices."

Given that this is how Dell already operates, it appears that Microsoft may be trying to prevent any radical reorganization or departure from the PC market. A desire to substantially alter the way the company does business, including breaking its dependency on PC sales, is believed to underpin Dell's desire to go private in the first place.

The deal is reported to still be on track, however, and a formal announcement could be made in the next few days.

I would fancy a guess that Microsoft wants to use Dell as an official channel to reach customers (individuals), that perhaps the combined marketing efforts of Microsoft and Dell can be combined to have some consumer products finally stick with mass appeal. It helps that Microsoft sinks a lot into R&D.

However if I understand Michael Dell's vision, this is the exact oppisite of where he wants to focus the business.

"Or maybe there’s another story behind Microsoft’s beneficence: The investor syndicate struggles and can’t quite reach the $22B finish line. Microsoft generously — and very publicly — offers to contribute the few missing billions. Investors see Microsoft trying to reattach the PC millstone to their necks — and run away.

Hats off to Steve Ballmer: Microsoft looks generous – without having to spend a dime – and forces Dell to keep making PCs."

Can't blame MS for this as they are losing the battle in the mobile market and PC sales are tanking.

Having a guaranteed partner that won't turn to Android or Linux will help

I would imagine that having a good product would help more than forcing dell to stay in PC business. MS seems to be doing everything it can to force itself on users instead of actually making software that people chose to use. First we get metro with the messed up UI for desktop users, then the new messed up office UI so it fits with tablets (who the hell is going to do serious work on a tablet?), now trying to force dell to stay with PCs. I guess that next step is lobbying for a law that commands that every household needs to have at least one WP and one Win8 device...

Can't blame MS for this as they are losing the battle in the mobile market and PC sales are tanking.

Having a guaranteed partner that won't turn to Android or Linux will help

I would imagine that having a good product would help more than forcing dell to stay in PC business. MS seems to be doing everything it can to force itself on users instead of actually making software that people chose to use. First we get metro with the messed up UI for desktop users, then the new messed up office UI so it fits with tablets (who the hell is going to do serious work on a tablet?), now trying to force dell to stay with PCs. I guess that next step is lobbying for a law that commands that every household needs to have at least one WP and one Win8 device...

Having a consistent experience across all platforms

If I were buying a tablet today and saw Windows 8 versus Android or iOS i would go with something I already know in Android or iOS.

Does anyone know what dell's server sales look like? They seem to sell a crap load and they are a major supporter of Linux in the server room. Maybe Microsoft is trying to stop losing market share there. Microsoft makes more money off the enterprise than they do the home user. Having that chunk of business decrease has to be hurting them a bit.

EDIT: Also, there isn't much choice on the home desktop market. People expect Windows. But in the server room its a whole other story.

Does anyone know what dell's server sales look like? They seem to sell a crap load and they are a major supporter of Linux in the server room. Maybe Microsoft is trying to stop losing market share there. Microsoft makes more money off the enterprise than they do the home user. Having that chunk of business decrease has to be hurting them a bit.

EDIT: Also, there isn't much choice on the home desktop market. People expect Windows. But in the server room its a whole other story.

I use Dell tower servers for small business as you can get some good bang for the buck paired with Server Small Business

Microsoft seems bent on becoming Apple. Having the ability to control hardware as well as software, The problem is that Apple never had anyone but Apple officially building hardware with Apple's OS on them. Apple has been desgining, engineering and building its hardware. The question is, does Microsoft really think other PC makers will not revolt on such a Dell purchase? I think its acceptable for Microsoft to build hardware like the Surface. I don't think PC makers should mind a little competition. The problem becomes as with Google buying Motorola on what happens to others who also are partners. Microsoft is might not be helping itself with Dell.

If it's the WSJ reporting it, then there's a financial angle - not a technical one. Somebody "leaked" this to the WSJ to influence the negotiations. They probably want MS to pony up some more cash... which may be a problem as holding too large a share of Dell would anger the other OEMs even more. I really doubt that it has anything to do with keeping Dell from leaving the MS fold. Michael Dell knows that pursuing other solutions is a dead end.

Microsoft seems bent on becoming Apple. Having the ability to control hardware as well as software, The problem is that Apple never had anyone but Apple officially building hardware with Apple's OS on them. Apple has been desgining, engineering and building its hardware.

Actually during the 90s they had third party hardware, but it one of the first few thing Job changed when he returned to Apple.